Is a layer 2 blockchain network that aims to improve the capabilities of Ethereum. It is designed to solve some of Ethereum’s major problems, including scalability and high transaction costs. In simple terms, Polygon works as a “scalability layer” over Ethereum, allowing developers to create faster and more efficient decentralized applications. Improve Ethereum network performance without compromising security.

Ethereum is one of the world’s leading decentralized blockchain and smart contract (smart contracts) platforms. It was created and launched in 2015 with the goal of extending the capabilities of blockchain technology beyond the simple management of cryptocurrencies, such as Bitcoin. Ethereum is designed to allow developers to create decentralized applications that automatically perform operations when certain criteria are met.

Smart Contracts are the backbone of blockchain-based technological innovation. Simply put, Smart Contracts are smart digital contracts: autonomous, secure and transparent.  Imagine that you have a traditional commercial agreement, but instead of relying on intermediaries or paper documents, everything happens automatically and unchangeably on the blockchain. Smart Contracts are computer programs that perform predefined conditions and actions when specific events occur. They are written in a special programming language and immutably recorded on the blockchain, ensuring the integrity and certainty of operations. How does this work? Let’s take a supply agreement as an example: once the parties involved meet the conditions, such as deliveries or payments, Smart Contracts come into action. Instead of having to rely on manual or intermediary procedures, the Contract Code ensures that transactions take place automatically only when all parties involved have fulfilled their obligations.  The are several advantages. Smart Contracts reduce the risk of human error, accelerate decision making and eliminate the need for expensive intermediaries. They also operate in a secure environment thanks to blockchain encryption, ensuring the privacy and protection of sensitive information.

To develop this project, we use Polygon blockchain, which uses the infrastructure and security systems of Ethereum, the most used and reliable blockchain, but with reduced costs. In fact, for everything that is written on a block of the chain, a fee must be paid for people who validate transaction. Since September 2022 Ethereum and Polygon change their validation system from the so called classic “proof of work” chain such as bitcoin to the innovative “proof of stake” that allows the use of much less energy-intensive machinery. So far, energy consumption drastically dropped making Ethereum one of the most promising blockchain in line with our business principles. In particular, as a result of this change, there’s no longer a network of energy-intensive mining devices competing with each other in order to create the next block for the underlying blockchain anymore. Instead, wealth plays a key role in the block creation process that makes use of PoS. Coins are locked up as collateral in the staking process (i.e. put “at stake”), in which the software then randomly selects a “staker” to create the next block for the blockchain. Regardless of whether a network runs PoW or PoS, creating the next block for the blockchain will provide the creator with a reward, but in PoW the chance of obtaining this reward could only be increased by employing more energy-hungry devices. PoS may only incentivize acquiring a higher stake to increase the odds of creating a new block, but the computational power of the underlying device is not relevant to this process. A participating device may still have to meet some requirements (e.g. storage capacity or bandwidth), but improving specifications will not yield more rewards. On the following figure, it is possible to see the annual energy consumption of proof of work (80-90 TWh/Year) and proof of stake system (0.01 TWh/Year) from September 2022.

We have opted to use the “eco-friendly” Polygon network because is a secon layer of Ethereum that uses proof of stake, which can tremendously reduce the amount of energy required to run the underlying blockchain. Based on 100 validators taking part in Polygon’s proof of stake network, it was estimated that “each transaction on Polygon produces just 0.206587559 grams CO₂,”² which is a long way from the 124.34 kilograms of CO₂ per transaction on the Ethereum network. Hence,is possible to establishes that there is a “limited environmental impact of minting NFTs on Polygon.”  In any case, the environmental impact of the chain, even if minimal, will be counted in the LCA.